Magic Johnson’s Essential Lessons in Leadership

What You Need to Know

• All leaders need knowledge and self-confidence, Magic Johnson says, but great leadership also requires humility and empathy.
• Perhaps most essential is a willingness to be bold and push past the doubts of others when a true opportunity presents itself.
• Ultimately, leadership skills can be taught and learned by anyone, but the best leaders have a special spark and vision that brings out the best in their team.

The agreement, which is still pending ownership approval and other customary closing conditions, would represent the highest price ever paid for a North American professional sports franchise. While impressive in its own right, however, the deal to acquire the Commanders is just the latest accomplishment for Johnson during his life “after basketball.”

Johnson sold his shares of the Los Angeles Lakers more than a dozen years ago, but he remains a minority owner of the Los Angeles Dodgers, Major League Soccer’s Los Angeles FC and the WNBA’s Los Angeles Sparks. His business interests also spread well beyond the world of professional sports into the infrastructure and urban development industries.

In fact, as Johnson told an audience of more than 2,000 wealth management professionals gathered at BNY Mellon Pershing’s Insite conference in Florida, he feels a deep, ongoing responsibility to use his notoriety and leadership talent to invest in inner-city communities and create redevelopment opportunities in underserved areas.

Johnson gave the Insite conference’s closing keynote address alongside his friend, mentor and business partner Jim Reynolds, the founder, chairman and CEO of Loop Capital. During an hour-long discussion, the pair cracked jokes and told a number of stories, but their real goal was to distill some key leadership lessons that can benefit anyone working in the business community.

As Johnson suggested, all leaders in both business and sports need equal parts knowledge and self-confidence, and they need to surround themselves with people who are ready, willing and able to contribute to collective success. But great leadership also requires humility, Johnson said, as well as empathy and, sometimes, an ability to confidently ignore the doubts of others.

Asked by Reynolds to reflect on “whether he was born a leader or whether he learned to be a leader,” Johnson said the answer in his case is both, but he believes the most essential lessons in leadership have to be learned.

“I think the basis of my ability to lead came from the work ethic that my father instilled in me,” Johnson said. “I grew up poor in a household with six sisters and three brothers, and my father had to have two or three jobs all the time to put food on the table, but he got it done. He worked for General Motors for 30 years and never missed a day, and he never was late.”

Johnson recalled that his own first job was working with his father in a trash-hauling business that he operated for extra income. It didn’t matter that Johnson was still young and had other pressing responsibilities in the form of his studies and his increasingly successful early basketball career. There was work to be done.

“When I was old enough, he had me working on that trash truck every day in the summer and every Saturday during the winter,” Johnson explained. “There were no exceptions, and it wasn’t allowed to be an excuse to miss my homework or my basketball practice.”

One weekend, Johnson recalled, there was a huge blizzard in Michigan, and he expected to get the day off — only to find his father waiting for him in the truck. During the frigid shift, Johnson’s father didn’t let him cut any corners or take an extra break in the cab of the truck to warm up, and it all sent a clear message.

“If you are willing to do one hard job halfway, you’ll probably end up doing everything in life that way,” John said. “That’s true whether you are practicing basketball, studying in college or running a business. My dad helped me to see that, and I try to do everything the right way — based on the life lessons that my father gave me.”

Johnson said another key element of great leadership is a willingness to defy convention — to have enough resilience to weather the skepticism of those who are more focused on being comfortable and maintaining the status quo than in pushing for progress.

Even during his time with the Lakers, Johnson said, he already knew he wanted to be a business executive after he left basketball. It only seemed natural to try to make connections with the team’s ownership and the dozens of majorly successful business executives who sat courtside at home games.

As such, he started cold-calling leading Los Angeles business figures and asked to take them out to lunch and learn from them about business. He asked many of them to be his mentors, and many took him up on the offer, impressed by his prowess and notoriety as a sportsman but even more for his honest eagerness to learn and be taught about a totally new field.

“The other players actually thought this was inappropriate, and do you know what? They actually called a meeting at one point and sat me down and said I should stop fraternizing with the ownership and all these business people,” Johnson said. “They told me it didn’t look right, and that it just wasn’t how things were done.

“Well, you know what I told them? I said, ‘Look, you guys might be good basketball players, and some of you are millionaires. But these guys are all billionaires, and I want to be a billionaire, so I’m going to hang with them!’” Johnson said with a laugh. “They saw that I wasn’t going to back down, and that was that.”

Johnson said it was uncomfortable at times to buck convention in this way, but it was work that has clearly paid off in the long run.

Thinking back over his many business ventures, Johnson said some of the most rewarding and informative experiences came during the establishment of a successful chain of movie theaters and coffee shops in inner cities during the 1990s and early 2000s.

“To make a long story short, everybody thought it would never work,” Johnson recalled. “Back then, people just didn’t think a movie theater in an inner-city setting would survive, let alone be highly successful. But I knew they were wrong, because of course Black people like to go to the movies, too.”

The key to success, Johnson said, was realizing how he could tailor the movie theater experience to meet the wants and expectations of a more diverse community, one that had traditionally been ignored by the big, established industry players.

One of his biggest insights, he said, was understanding that people living in these communities were often living in poverty. That didn’t mean they wouldn’t want to pay for movie tickets, he explained, but it did mean they probably weren’t going to be able to afford a fancy dinner before or after the movie.

The innovation? Why not pivot from the traditional approach of just offering candy and snack foods at the concession stand and instead provide affordable, dinner-style food that lets people enjoy their dinner while watching their movie?

“It was a big success,” Johnson said. “My first theater quickly climbed into the top 10 highest-grossing theaters in the nation, and this was happening in an inner-city community. I can tell you, we shocked the whole industry, and we eventually built six theaters before AMC came in and bought us outright, which was very cool.”

To cement the point, Johnson shared a similar story about collaborating with the leadership of the Starbucks corporation to bring more coffee shops to underserved urban communities.

“I was in a conversation with [former Starbucks CEO] Howard Schultz at one point, because he was really impressed by what we had done with the movie theaters,” Johnson recalled. “I remember telling him that Black folks and Latinos, we like coffee too, and we’ll pay $3 for a great cup just like anyone else, but we should probably replace the scones with pecan pie.”

By the time the collaboration ended, Johnson had helped to build 125 Starbucks in over 40 inner-city markets.